Leftists doing anything except just building more housing
Rent is falling all over the Southeast where housing has been built in droves, and actually in greater quantities than new demand. The only solution is just flooding the market with housing.
Certainly, building new housing works well at a policy level. But calling for new housing doesn't seem to work at a political level. We've been fighting this fight ever since the financial crisis and every election cycle brings us a few victories with an equal number of reversals. And it isn't only within the left that the opposition arises; it wears red in progressive neighborhoods, but it seems to have a taste for brown when that's convenient.
I don't think that the urbanist movement can succeed if it is driven by policy wonks who want to throw out the rulebook and impose reforms from the ivory tower without a real small-d democratic political strategy. Many of us are used to fighting the political battle against climate change by being Absolutely Correct and expecting that Science with her indefatigable armies of Reality will guard the flanks. A fully economic fight like this one just doesn't have the same kind of inevitability. Every step forward on the ground weakens the sense of urgency in the legislature, leading to an equilibrium trap without a vigorous political movement that can hold momentum.
Nerds do not usually want to do politics, but in housing you have to do politics.
IMO, this is largely because the government's job is to stay out of the way, and people who hold elected office in areas where this is a problem (the Northeast Corridor and West coast generally), mostly have a certain something in common that indicates they are likely to think they need to "help" the market along.
It's not a coincidence that the "housing crisis" continues unabated in places like NYC that are losing population, yet appears to be solved in areas in the south that are absorbing those people.
I voted you up because you're correct, in that the only solution is construction and there are people that are doing everything in their power to avoid that truism.
But I don't think it is a left/right issue. In certain regions it may be the left, in others the right, but generally it is subset of both that have investment in artificial scarcity. It's just the justifications that change depending on ideology.
I've noticed that it's super-rich leftists who oppose permits for new housing, not all leftists.
An interesting group of people they are, the super-rich leftists. The way they weaponize the environment to prevent others having what they want... really makes you wonder.
There's no one silver bullet, it will have to be a multi-front push:
1. Just build more
2. Zone for multi-family housing
3. Get rid of minimum parking and minimum lot size requirements
4. Allow mixed-user residential and commercial buildings
5. Shift property tax towards taxing the land and exempting buildings from tax, to force speculators to sell vacant land and derilect buildings for development
6. When things start moving, invest in walkability and public transit to support dense urban cores. Cars are great for low-density, but paying for miles of road and polluted air in dense city cores is silly behavior
Half-agree: zoning restrictions and non-essential building regulations are a de-facto government handout to existing property owners.
At the same time, apologists for rentiers will do anything except taxing unimproved land value (which among other virtues, functions as a vacancy tax to reduce unproductive speculation, and incentivize development).
The blunt reality is a zero-sum tension: homeowners and landlords want number go up, new buyers and renters want number go down.
China built a lot of housing and it didn't do anything until the ponzi scheme started unraveling.
Asymptotically what you said might be true, but before it gets there years might pass as they did in China. It's not clear how long this madness would last if not for COVID.
I thought it was development companies that build houses? And why would development companies build so much housing that the value started to drop? Are you saying that "leftists" put up barriers to new housing such as regulation that helps drive up the overall cost of building and hence the price of housing? I would agree with you there. Are you sure "housing has been built in droves" is what brought the price of rent down?
House prices went sky high because of investors/speculators increasing demand (and massive immigration). Maybe if the government regulated more who buys housing (home dwellers not investors) rather than regulating what gets built. Also, have more sensible immigration levels.
Since developers will be less likely to build with falling prices perhaps the govt can build rent to own housing for lower income earners. Or incentivize private developers to build affordable housing.
High prices doesn't necessarily mean its purely a supply problem. If profit is high with low supply for developers what incentive would they have to increase supply?
I agree with the general principle that game theory is a powerful tool for public policy, but the idea of these transferable development rights or "air rights" seems a bit absurd to me.
What the government is saying by allowing these rights to be sold, is that the place to which they are transferred to has arbitrarily restrictive zoning. In my mind, the value of transferrable development rights should be zero. Zoning should actually have some hard principle behind it that isn't bendable by allowing the non-development of some other desirable piece of land. Either a building is too tall for the neighborhood or it isn't. It should be "too tall unless you pay a farmer 10 miles away".
Why is uneven, concentrated development some kind of public good?
How does this position unroll? How does the farm eventually get developed in 50 years? Do they have to buy TDR from someone else? Does an "equivalent" TDR have to be demolished?
Montgomery county is one of the worst places in the entire US for housing shortage.
The whole first part of the article tries to highlight the success of the 1972-era zoning policy, but ends up making the opposite point, whereas agricultural land is preventing enough housing being built in the north of Montgomery County, whereas Virginia has successfully incorporated density (and more jobs as a result).
Not sure if that was author's intention, or how game theory is even relevant here. It's just zoning and housing policy and understanding of the zero-sum dynamic for desirable land. Some other examples from the article don't make much sense either (except Houston).
Source: DMV native for 20+ years, also an economist (by education, not profession).
I suspect the publication paid the author to write a very particular opinion, because the article reads more like a NIMBY-defending piece.
If you want to understand a fairly non-trivial amount of the brokenness of the world, pondering the implications of "Hey, what if we thought about what our incentives will actually do instead of what we want them to do, and made plans based on that?" being a brilliant and bold breakthrough in the world of governance rather than common sense can take you a long way.
Housing is a capital G, Government, issue. There are geo-political forces at play that make it hard to deal with housing rationally. The first starts at the border; you have to ensure you can count accurately who is coming and who is going (as well as who plans on coming and who plans on going). This doesn't mean lock down the borders. It means understanding the inputs and outputs. Which leads to the next force. Homelessness.
We must have sensible laws and process from those who are unhoused. Is it financial, medical, psychological, addiction, abuse, etc? Each of these has a different solution; and the law needs to have enough teeth to enforce those solutions.
It's a gradient of solutions. If you fall out of a bracket, there should be a more affordable bracket that is humane. The threat of living on the street doesn't help anything. Plus, in California alone, enough has been spent to solve the problem tenfold. I suspect devious forces at work behind that....
So we've controlled our population inputs / outputs from one vector, we've put a cap on homelessness, we now need....... affordable, mass, fast public transit.
Look, we all can't live in NY or by the beach or in all the fun places. Uprooting the entire economic system is a no go with too many unforeseen consequences. Supply is only way to possibly lower the costs in desirable places, but you are competing against the world.
The bare-minimum is that from anywhere in the country you live. You are not far from fast transportation. Bullet trains and things of that sort. That means you can actually develop farther and farther out, but still have those people participate in the main hub's economy.
If you sort those things out, you will allow people to decentralize and will force commercial entities to do the same. This will put immediate pressure on the already over-stressed commercial real estate market. Once that relents, we may see the cost for housing come down everywhere.
Housing policy fails because everyone is playing a different game. Zoning boards, developers, homeowners and renters all have completely different incentives and nobody is solving for the same outcome.
Title is annoying and the article doesn't bear it out. This is not "reverse" game theory. It's just game theory and incentives: something you'd learn in any course of study of economics.
But yes, if you change incentives, you can change behavior. And if you can find a way to create and enforce incentives that push toward an outcome you want, then you get more of that outcome. This is a good lesson to remind people of: incentives matter. So often---especially in discussion of public policy---we see conflation of stated desires with incentives, and of incentives with "cash paid to someone". The former is fallacy, and the latter myopic.
im not convinced about this. its way more simple to delete zoning laws and replace them with a resident vote. that means the community can decide directly in a bottom up local way without affecting the whole city. layer a tax incentive on top of that where part of the property tax rate is calculated from local average rent (of course thats impossible in cali with prop 13) so areas that want to keep themselves exclusive pay more and that money can go to public housing in other places with better neighbors.
Do you really need Game Theory to figure out you need to build more houses and can't let NIMBY's be in charge of the decisions for where and when that is done?
Go read about things like rent maximizer from yardi then come back. Another reason people can't afford to buy housing is because companies like these enable apartment complexes to collude on pricing under the guise of software. Rent is higher than a mortgage payment in some places, and folks can't afford to pack any savings away. So they rent until they fall behind, then they rent something less ideal, then they leave the area or live out of their car. Either way it's garbage. The only reason I could afford my home is because I managed to find a private renter who was charging significantly below market rate for years so that I could build a down payment, and I managed to buy at the right time. Two years after closing the 'value' of my home jumped 60% and I would have been priced out, it's all just bullshit.
Maybe instead of going around our elbow to get to our asshole we should just call a spade a spade and make rent 'optimization' illegal. Then once people can actually afford a home we'll have a better picture of how many should be built. Because ultimately? People just want to be able to live without the stress of bills and the looming worry of maintaining a roof over their heads.
St. Patrick’s Cathedral used the new [air rights] system in 2023, selling some of its rights in a deal worth as much as $164 million to fund its maintenance
I don't see how this creates a sustainable dynamic, rather than merely making a more comfortable journey to that same financialization attractor (ie Moloch). It's easy to feel good about this church (or that farmland) was given a cash infusion and could keep on running its same cute bespoke non-IREAM (inflation rules everything around me) operation, but what happens when that bolus of cash has been inevitably spent and they need another one?
It feels like this is the fundamental problem with every heady touting of market-based reforms. Of course the initial trend is consensual and both parties benefit (positive sum) - otherwise it wouldn't happen! But then as the feedback loops from market optimization set in over the longer term, those positive qualities gradually disappear in favor of a dystopian nonconsensual dynamic.
(FWIW I'm personally undecided whether the root problem here is that capital inevitably coalesces and therefore government intervention is required to keep it distributed, or whether the agglomerating dynamic stems from the centralized money-printing fountain that flows to the politically connected. But there is enough dumb money sloshing around these days that the distinction is probably moot)
The housing shortage is due to humans breeding and overrunning their habitats. It’s not something to be fixed. It’s badly needed backpressure which keeps the planet livable. Do you want to live in a concrete jungle? Do you want to kill the earth? Do we need any more people?
Selfish influencers are trying to get housing built in “cool” spots, (because they don’t make enough money) rather than wait their turn or make other neighborhoods cool. Ignore them and their campaigns to ruin everything.
76 comments
Rent is falling all over the Southeast where housing has been built in droves, and actually in greater quantities than new demand. The only solution is just flooding the market with housing.
I don't think that the urbanist movement can succeed if it is driven by policy wonks who want to throw out the rulebook and impose reforms from the ivory tower without a real small-d democratic political strategy. Many of us are used to fighting the political battle against climate change by being Absolutely Correct and expecting that Science with her indefatigable armies of Reality will guard the flanks. A fully economic fight like this one just doesn't have the same kind of inevitability. Every step forward on the ground weakens the sense of urgency in the legislature, leading to an equilibrium trap without a vigorous political movement that can hold momentum.
Nerds do not usually want to do politics, but in housing you have to do politics.
It's not a coincidence that the "housing crisis" continues unabated in places like NYC that are losing population, yet appears to be solved in areas in the south that are absorbing those people.
But I don't think it is a left/right issue. In certain regions it may be the left, in others the right, but generally it is subset of both that have investment in artificial scarcity. It's just the justifications that change depending on ideology.
An interesting group of people they are, the super-rich leftists. The way they weaponize the environment to prevent others having what they want... really makes you wonder.
There's no one silver bullet, it will have to be a multi-front push:
1. Just build more
2. Zone for multi-family housing
3. Get rid of minimum parking and minimum lot size requirements
4. Allow mixed-user residential and commercial buildings
5. Shift property tax towards taxing the land and exempting buildings from tax, to force speculators to sell vacant land and derilect buildings for development
6. When things start moving, invest in walkability and public transit to support dense urban cores. Cars are great for low-density, but paying for miles of road and polluted air in dense city cores is silly behavior
> The only solution is just flooding the market with housing.
Definitely true, but much harder to do in areas that are already built up and near jobs vs. building in empty desert for retirees.
At the same time, apologists for rentiers will do anything except taxing unimproved land value (which among other virtues, functions as a vacancy tax to reduce unproductive speculation, and incentivize development).
The blunt reality is a zero-sum tension: homeowners and landlords want number go up, new buyers and renters want number go down.
Asymptotically what you said might be true, but before it gets there years might pass as they did in China. It's not clear how long this madness would last if not for COVID.
House prices went sky high because of investors/speculators increasing demand (and massive immigration). Maybe if the government regulated more who buys housing (home dwellers not investors) rather than regulating what gets built. Also, have more sensible immigration levels.
Since developers will be less likely to build with falling prices perhaps the govt can build rent to own housing for lower income earners. Or incentivize private developers to build affordable housing.
High prices doesn't necessarily mean its purely a supply problem. If profit is high with low supply for developers what incentive would they have to increase supply?
Cue the downvotes.
Also I have limited sympathy for people who move to high COL areas and then are upset by housing prices.
Fixed it for you.
What the government is saying by allowing these rights to be sold, is that the place to which they are transferred to has arbitrarily restrictive zoning. In my mind, the value of transferrable development rights should be zero. Zoning should actually have some hard principle behind it that isn't bendable by allowing the non-development of some other desirable piece of land. Either a building is too tall for the neighborhood or it isn't. It should be "too tall unless you pay a farmer 10 miles away".
Why is uneven, concentrated development some kind of public good?
How does this position unroll? How does the farm eventually get developed in 50 years? Do they have to buy TDR from someone else? Does an "equivalent" TDR have to be demolished?
The whole first part of the article tries to highlight the success of the 1972-era zoning policy, but ends up making the opposite point, whereas agricultural land is preventing enough housing being built in the north of Montgomery County, whereas Virginia has successfully incorporated density (and more jobs as a result).
Not sure if that was author's intention, or how game theory is even relevant here. It's just zoning and housing policy and understanding of the zero-sum dynamic for desirable land. Some other examples from the article don't make much sense either (except Houston).
Source: DMV native for 20+ years, also an economist (by education, not profession).
I suspect the publication paid the author to write a very particular opinion, because the article reads more like a NIMBY-defending piece.
We must have sensible laws and process from those who are unhoused. Is it financial, medical, psychological, addiction, abuse, etc? Each of these has a different solution; and the law needs to have enough teeth to enforce those solutions.
It's a gradient of solutions. If you fall out of a bracket, there should be a more affordable bracket that is humane. The threat of living on the street doesn't help anything. Plus, in California alone, enough has been spent to solve the problem tenfold. I suspect devious forces at work behind that....
So we've controlled our population inputs / outputs from one vector, we've put a cap on homelessness, we now need....... affordable, mass, fast public transit.
Look, we all can't live in NY or by the beach or in all the fun places. Uprooting the entire economic system is a no go with too many unforeseen consequences. Supply is only way to possibly lower the costs in desirable places, but you are competing against the world.
The bare-minimum is that from anywhere in the country you live. You are not far from fast transportation. Bullet trains and things of that sort. That means you can actually develop farther and farther out, but still have those people participate in the main hub's economy.
If you sort those things out, you will allow people to decentralize and will force commercial entities to do the same. This will put immediate pressure on the already over-stressed commercial real estate market. Once that relents, we may see the cost for housing come down everywhere.
But yes, if you change incentives, you can change behavior. And if you can find a way to create and enforce incentives that push toward an outcome you want, then you get more of that outcome. This is a good lesson to remind people of: incentives matter. So often---especially in discussion of public policy---we see conflation of stated desires with incentives, and of incentives with "cash paid to someone". The former is fallacy, and the latter myopic.
Maybe instead of going around our elbow to get to our asshole we should just call a spade a spade and make rent 'optimization' illegal. Then once people can actually afford a home we'll have a better picture of how many should be built. Because ultimately? People just want to be able to live without the stress of bills and the looming worry of maintaining a roof over their heads.
>
St. Patrick’s Cathedral used the new [air rights] system in 2023, selling some of its rights in a deal worth as much as $164 million to fund its maintenanceI don't see how this creates a sustainable dynamic, rather than merely making a more comfortable journey to that same financialization attractor (ie Moloch). It's easy to feel good about this church (or that farmland) was given a cash infusion and could keep on running its same cute bespoke non-IREAM (inflation rules everything around me) operation, but what happens when that bolus of cash has been inevitably spent and they need another one?
It feels like this is the fundamental problem with every heady touting of market-based reforms. Of course the initial trend is consensual and both parties benefit (positive sum) - otherwise it wouldn't happen! But then as the feedback loops from market optimization set in over the longer term, those positive qualities gradually disappear in favor of a dystopian nonconsensual dynamic.
(FWIW I'm personally undecided whether the root problem here is that capital inevitably coalesces and therefore government intervention is required to keep it distributed, or whether the agglomerating dynamic stems from the centralized money-printing fountain that flows to the politically connected. But there is enough dumb money sloshing around these days that the distinction is probably moot)
Selfish influencers are trying to get housing built in “cool” spots, (because they don’t make enough money) rather than wait their turn or make other neighborhoods cool. Ignore them and their campaigns to ruin everything.